Vol. 315 No. 8
I move:
That the Minister for Agriculture be authorised to charge and levy and have paid to him a levy as respects—
(a) milk received from a herd for processing,
(b) any bovine animal which is slaughtered, and
(c) any bovine animal which is exported live from the State,
in such circumstances and subject to such conditions as are specified in the Act giving effect to this resolution.
Is the motion agreed?
No.
Does the Deputy wish me to put the motion?
I wish to speak on the motion as well as on the Bill. I think I am entitled to speak on the motion.
It is not usual to debate the financial resolution because the same discussion applies.
I realise that but they are separate items and I am entitled to discuss both of them. I am availing of the opportunity of speaking against item No. 11 on today's Order Paper which is only now being introduced because it serves as an opportunity to underline my party's very strong opposition to the proposition that levies should be introduced. Item No. 11 is a separate item from the Bill.
I am very strongly opposed to the concept of a levy for a number of reasons. This levy is being introduced to finance disease eradication and is one of a number of levies being introduced at present by the Government. We had the 2 per cent levy which is being imposed across the board to finance general Government expenditure without any excuse being given, notwithstanding the fact that it is accepted by anybody with a reasonable knowledge of economics that a levy on production is the least effective and the least fair way of raising money because it is indiscriminate.
This levy is paid whether or not people are making a profit. It is paid by all people whether they have an income which would put them in the tax net or not. We now have this bovine diseases levy. We had another increase in fees charged at exactly the same point for nearly the same purpose, the increase which took place last year in the veterinary inspection fees, again introduced by this Government. On today's Order Paper we have another fee being introduced for the first time—the dairy inspection fee. This service was carried out in the interests of public hygiene at public cost in the past and is now to be paid for by the farmer in the form of a levy. The important thing to remember is that this levy is unfair because it bears no relationship to ability to pay or to whether the person paying it has an income which would be taxable.
In certain circumstances in the case of meat this levy may be paid by the consumer. Where demand exceeds supply—we are talking about heifer meat which is used on the domestic market and is different from bullock beef which is usually exported—the butcher is forced to pay a price which is inclusive of the levy. In other words, he pays the levy, not the farmer as was intended. This bovine disease levy, in addition to the 2 per cent levy, can in certain circumstances—and I make this statement quite categorically—of demand exceeding supply be a consumer levy.
What is causing concern in respect of this levy is that it is permanent. The 2 per cent levy will not be permanent but will be replaced by another equally unpalatable form of taxation. There is no indication as to the length of time it will continue. It could continue forever. It could continue beyond the time when tuberculosis and brucellosis has been eradicated. There is nothing in the Bill which says that this levy will cease to be paid as soon as the disease in question have been eradicated. There is no means of cutting off the levy at that point. Furthermore, there is no proper provision made as to how the levy will be used. It could be used for purposes other than disease eradication. There is nothing in the Bill which would require that the levy be paid into a particular fund where it would be kept separate from other Government funds. This levy could be used for different functions than disease eradication. At some future time it could happen that only a small amount of money would be needed for disease eradication but three or four times as much money was collected by this levy and it could be applied for purposes totally unrelated to disease eradication. There is no guarantee that this levy will be used as it should be, that is solely for the purpose of disease eradication.
As far as the development of our agricultural economy is concerned, the introduction of this levy, in common with the other levies, could not have come at a worse time. We are at a point where farmers' confidence is, in the opinion of many people outside this House, at a lower level than it has been at any time, certainly since 1974 and perhaps since long before that.
In the recent price negotiations at Brussels there has been what amounts to a virtual price freeze—a 1½ per cent increase in prices at a time when costs to farmers have been increasing at not 1½ per cent but about ten times that amount. Farmers also have to pay much higher interest rates on their borrowings as a result of changes made in the bank rate in the recent past. People on all sides of the House have encouraged farmers to invest and borrow substantial amounts of money. They now find their interest rates are increasing at a time when the prices they are getting for their products are being increased by only 1½ per cent for most commodities and nil for milk which is the one line of production from which our small farmers had been able to make a reasonable income in the past.
At this time when, on the one hand, farmers are being squeezed by a small increase in the prices they are receiving for their goods and, on the other, by increased costs for inputs and interest charges, the Government deem it right to introduce not one levy but four different levies—a 2 per cent levy across the board, a 1 per cent levy for bovine disease eradication, increases in fees for veterinary inspections and the introduction of a fee for the inspection of dairy products. I do not believe any Government which have the interests of Irish agriculture at heart would have taken these actions.
I want to point out to anybody who believes these measures are fair and just that if they result, as I believe they will, in accelerating the decline in farmers' confidence, the consequences will be felt not solely by the farming community. The number of cattle being sold to our meat factories will decline if farmers cannot make a reasonable profit on sales of cattle. Already our factories are slaughtering at about only half of their full capacity. The factories are having to pay overheads and to maintain buildings and staff and yet they are slaughtering cattle at only half the rate that they should be if the cattle were being supplied to them. Our meat industry is working at half-cock and that is endangering the employment of people engaged in that industry.
The effects of the agricultural depression in so far as they affect employment in the meat industry are reaching right into the centre of this city. A very substantial meat plant is located in Grand Canal Street. That plant will be affected because this levy will reduce the profitability for farmers supplying meat for slaughter in that plant and indirectly will affect employment in that industry. Also over the past eight or ten months there has been a remarkable decline in the number of cattle being exported from this country in the form of beef carcases. If my figures are correct, in the past eight months fewer cattle have been exported dead from this country than were exported in the same months last year. This is the very time that this Government decide to accelerate that process by introducing a 2 per cent levy and now this disease levy, to make it even less profitable in the future than it was in the past for people who were already sending fewer cattle to the factories. Surely no policy could be less wise in the interest of this country than one designed to accelerate a process whereby the number of cattle being slaughtered for export is falling.
Further, the levy which it is proposed to authorise in the Financial Resolution will be paid on an animal regardless of its value. If you send for slaughter a pedigree animal which is of very high value—say £1,000 if such were possible—you will pay £3. If you send an animal to the knacker and you get only £5 for it, the animal is useless but apparently you will still have to pay £3 levy on that animal. Furthermore, this levy would have to be paid on reactors. If you have to get rid of an animal because it is a reactor for which the Government have decided you must be compensated, and the Government are paying this compensation, they will be handling the compensation to you with one hand and taking it back, in the form of the levy, with the other hand. Could anything be more ridiculous? The Government are giving a man compensation because he has to have his animal slaughtered and then they are taking the money back from him in the form of a levy on the slaughtered animal.
This is a good example of what could be called circular payments, with administrative time being used up collecting money with one hand and giving it out with the other and leaving the farmer in exactly the same position as he was. We have a levy on the very animal for which compensation is being paid at the same time for exactly the same transaction. This is all creating employment in the public service administrating the compensation scheme on the one hand and the levy scheme on the other. Could anything be more ludicrous? It surprises me that reactors have not been exempt from this levy. In the case of the 2 per cent levy, which admittedly is only temporary but very objectionable, reactors have been exempted but they are not exempted from this one. If there was a case for exempting them from any levy it surely should be from the levy being charged for the purpose of eradicating a disease to which they have reacted and for which reaction compensation is being paid. Yet, under the Bovine Diseases (Levies) Bill the levy is being charged on reactors and it is not being charged under the 2 per cent levy. This is a very anomalous situation, to say the least.
I have made these points in respect of the levy itself. On this resolution I do not wish to deal with the provisions of the Bill and some of the collection powers being taken. However, I will make one concluding observation in relation to the resolution. The purpose of this levy is not specified clearly anywhere, but it is ostensibly to pay for the cost of disease eradication. Disease eradication is primarily a matter of public health and is of concern to the entire community because these diseases can and do spread to humans in certain circumstances. They are known as zoonoses. I will spell it for the Minister if he wishes me to do so.
I thank the Deputy. I have never heard the word before.
I will have more to tell about that later. These zoonoses, namely diseases common to both humans and animals, are tuberculosis and brucellosis and they can spread from one to the other. There has been quite a high incidence of brucellosis among humans in this country and this is not only among people engaged directly in the livestock industry, and obviously veterinary surgeons, but also among people who have very tenuous connections with agriculture. The eradication of brucellosis is a matter of concern to the entire community, not solely to farmers. Also there is strong evidence that bovine tuberculosis also can spread and lead to tubercular conditions in humans. This gets very little attention in the media or elsewhere. In my contribution on the Bill itself I hope to go into greater detail about that. Very substantial reports have been made by the Joint Services Committee on Zoonoses in relation to the prevention of the incidence of these diseases among humans. One concerns meat and the other milk. I regret to say that these reports were presented to the Minister for Health as far back as 1973 or 1974, and, to the best of my knowledge, no action has been taken by either the Minister for Health or the Minister for Agriculture, and that includes the previous Minister for Health and the previous Minister for Agriculture.
There is a very serious danger of brucellosis and perhaps tuberculosis being contracted by humans by virtue of the fact that approximately 25 per cent of all the milk consumed in this country is consumed in an unpasteurised condition. In other words, action has not been taken to ensure that brucellosis is eliminated from that milk. One quarter of all milk consumed is in that condition. A lot of milk is produced in parts of the country where the rate of brucellosis among herds is 25 per cent and the risk of this disease being passed from infected herds to human beings is quite serious. When an outbreak of brucellosis occurs the Department of Agriculture are very sedulous in warning members of the farming community not to feed milk from infected animals to other animals. They are not so sedulous in telling people not to give that milk to members of the family.
They tell them to get rid of the reactor.
In the pre-intensive areas not all animals are got rid of or even tested and there may be reactors in substantial numbers on farms where milk is being consumed in an unpasteurised condition.
Is the Deputy anticipating the Bill?
I am not.
This is a motion for a Financial Resolution.
The purpose of the levy is to pay for disease eradication. The concern about these diseases is not solely an agricultural one. There is a very substantial human health dimension and I do not believe sufficient action is being taken to prevent the danger to human health. Sufficient warnings have not been given about the use of unpasteurised milk and the consequences for public health of outbreaks of brucellosis and tuberculosis. This is a very serious matter which transcends any considerations farmers might have in relation to the sale of milk. I should like to see a much closer liaison between the agricultural authorities and the health authorities in respect of this matter.
I do not believe the farming community should be saddled with the entire cost of disease eradication. This may well be the direction in which we are moving with this levy. There is provision in the Bill for the levy to be increased by order to an unspecified and unlimited extent and it may well be that the entire cost of disease eradication and more will be imposed on the farming community. Disease eradication concerns human health just as it concerns animal health and it is not right that one section of the community should be asked to bear sole responsibility.
It is unfair that farmers who have been making every effort to eradicate disease from their herds and have been taking every possible precaution should have to pay this levy at the same level as people who have not taken any precautions and whose diseased herds may spread infection to the herds of other farmers. There is no discrimination between the farmer who has been cooperating with the Department and the farmer who has not made any effort at all.
I would ask the Minister to consider other ways of paying for disease eradication. During the course of the debate on the Bill I hope the Minister will see the error of his ways, although I fear that this levy was not dreamed up in the Department of Agriculture; I believe it emanates elsewhere. It does no credit to the Minister's negotiating abilities that he was not able to prevent the introduction of this levy, the 2 per cent levy and all the other levies.
Any Minister must be judged by results and not by his good intentions or what he may privately say to the press. I say this without any animosity towards the present incumbent. As far as farmers are concerned, the results are a 2 per cent levy, a disease eradication levy, a fee for his dairy inspection, a fee for veterinary inspection and at the same time a price freeze for milk and a 1.5 per cent increase for other products, combined with a 15 per cent increase in farming costs. We all accept the good intentions but these are the results which will count in the ballot box. The results are in the form of these levies and in the form of declining farmer confidence at this time. This is to be regretted by the Minister and by the country, although the Minister may regret it for different reasons. The verdict on these measures will not be favourable.
This measure is entwined in several ways with the Bill we dealt with some days ago. My party consider that a levy is the wrong way to raise money from farmers. It is necessary to instil a feeling that bovine TB and brucellosis must be eradicated as a matter of urgency. For various reasons the eradication scheme has not been as successful as it might have been, but a levy is not the correct means of tackling the problem. It is unfair for several reasons and bears no relation to the ability to pay.
Any form of taxation or any levy collected by a Department of State must have some reference to ability to pay. It is a wrong approach to say that a person who sells the milk of one or two cows has to pay the same percentage of his small cheque as the man who sells the milk of 200 or 300 cows. The same applies to cattle for slaughter. If a person has only a few cattle for slaughter whether they go to the butcher, the meat factory, or for live export, it is unfair to say he must pay as much from his small profit as the man who has hundreds of cattle for slaughter and makes a bigger profit.
I know the Minister is providing that it is per head so the amount is bigger for the bigger person. A levy is a tax in another form or in another word. This is a tax on a very limited source of income for the smaller person who sells a small amount of milk or a small number of beasts. A large percentage of that small income will go on this levy. That is unfair to the small man. Like the 2 per cent I object to the levy for that reason. It is unfair in its application.
On the question of cattle for slaughter the levy is £3 per head. With the 2 per cent levy which has already been introduced, this will have a serious effect on our meat factories and our beef producing industry. When I spoke about the 2 per cent levy in this House I said this, and I say it now in regard to this levy of £3 per head. Some people have been engaged in the production of fat cattle and have been feeding them during the winter months and producing cattle at a time when they were not available from any other source for the meat factories. These people are considered rich. They are known to some people as beef barons. At certain times of the year they were the only source of supply for our factories.
I discussed this problem with three factory managers in my constituency. As I say, these people are known as beef barons and they are not the kind of people with whom I have much sympathy because they are big, rich and influential. At certain times of the year they provide the wherewithal for our meat factories to keep up their employment. It is freely admitted that the amount of profit in that business at present is low. The crucial point is whether or not they will continue in that business, and whether the profit available to them from fattening cattle during the winter is lucrative enough to keep them in the business. I want to impress on the House and the Minister that they can change their way of farming. That is no bother to them, and it is no skin off their nose, but it will mean unemployment in our meat factories.
Hear, hear.
That is why I mention it. The 2 per cent already introduced has had some effect on employment in the meat industry in Leixlip, where there had to be a temporary close down. Let us hope it is as temporary as we hope it is. The profit is admittedly low at present, and if these people do not continue in the beef trade—and there are many reasons why they should not if they are thinking of their own personal gain—and I presume they think of that mostly——
Sometimes.
——if they do not continue in the production of beef during the winter months when cattle are not available from grass, and when the factories have been finding they have not got a very big supply, if that source is cut off, or partially cut off, we will have lay-offs in our meat factories. This will mean temporary lay-offs for 1,000 workers in my constituency. That is why a levy is not a good thing for the meat industry. We should think about it. I am not against the Minister or disagreeing with him. I believe that taken globally farmers should make a contribution to the cost of services, but it should be an overall tax situation. Otherwise some people will be paying more than their share of their income in relation to other people. I believe farmers should pay tax like everybody else. Services should be provided out of general taxation to which the farmer has contributed his fair share. I make no apology to anyone for saying the farmer should pay his fair share. Because cattle disease eradication is so important and so much in the national interest, it should be paid for out of general taxation to which the farmer has contributed his fair share the same was as everybody else.
When I made a suggestion four or five years ago I was not very popular with farming organisations who are now proposing the same thing themselves. I suggested that they should pay on the accounts system like every other business. That should be the easiest thing in the world for farmers. They have accounts which they are doing their best to boost in regard to farm modernisation. They are endeavouring to prove that they are farming well. It is ridiculous and foolish to say they cannot produce accounts.
Having said all that, I am against the principle of a levy because I believe it will discourage the kind of people who produce the beef for our factories. We should be trying to encourage them. I want to say a word about butchers who buy mostly heifer meat now and who are, I understand, bringing the Minister for Finance to law to ascertain whether it is constitutional or not to impose the original 2 per cent levy. Where a small farmer sells a heifer to a butcher there is no question of a levy. He wants his price and that is it. The butcher buys from him and if the levy is being paid it is being paid by the person who buys the meat from the butcher. It is a consumer levy. There is no way in which, if the levy is imposed on farmers who sell to butchers, it can be separated from the total price paid by the butcher. If a levy is to be paid between the farmer, butcher and consumer, the consumer will pay it.
Reference has been made to the length of time the levy will last. When we have eradicated the disease will the levy be withdrawn, or will it have been increased a number of times before that? Will it be applied to something else? Regardless of whether it is a steer, calf or heavy bullock the levy is £3. I condemned the 2 per cent levy but, bad and all as it was, it had some merit in that it was only 2 per cent. For a small bullock it was less and for a big bullock it was more. This is £3 regardless of size. It is £3 for a calf a butcher buys and kills and it is £3 for a bullock worth £700 or £800. A flat rate on all beasts killed does not make sense. Has it to be paid on reactors or on beasts one gets rid of to a knackers for dog meat?
I do not disagree with the Minister when he says that farmers should make some effort to pay for services they are receiving. The eradication of disease is important to the country. It is vital to the meat and milk industries which form the greater part of our economy. Instead of imposing taxation on farmers by way of levy we should face them and say: "You have accounts. Do not try and fool anybody". Any farmer worth his salt keeps accounts. It is ridiculous to think we cannot get a proper system of taxation for them and get a proper contribution from them. We should not be messing around with levies which are unfair and unjust on the weaker section of the farming community. On the face of it, a flat rate of £3 per beast slaughtered is unfair.
If this levy came from, as has been suggested, the Department of Finance I would ask the Minister to go back to the Government and ask them to introduce a fair system of taxation for farmers and not to do it by way of levies.
I join with my colleagues in voicing my unqualified opposition to this levy. As I said before, it was a pity that Fianna Fáil did not tell people in the last general election that they were going to do these things. When we were in power we were branded as socialists by those now on the Government benches. In a canvass in rural areas it was made clear to the farming community that if Fianna Fáil were successful they would alleviate these taxes and life would be rosy. When Deputy Clinton was Minister for Agriculture he raised farm income from £250 million——
We are not dealing with farm incomes. We must stay on the motion, which is a financial resolution.
(Cavan-Monaghan): On a point of order surely the income of farmers is relevant when we are considering their capacity to bear a further levy.
We are discussing a financial resolution, which is a formal matter. It deals only with a levy. We are not going to discuss general farm incomes or taxation.
(Cavan-Monaghan): Resolution No. 11 which we are discussing proposes to impose a levy on milk, slaughtered animals and exported animals which will have to be paid by farmers.
Yes and we are going to stay on that.
(Cavan-Monaghan): Surely farmer's incomes comes into that?
Deputy Hegarty is in possession, not Deputy Fitzpatrick.
(Cavan-Monaghan): If it is not relevant we should not carry on the debate.
Deputy Hegarty is in possession. Deputy Fitzpatrick should not lecture the Chair.
(Cavan-Monaghan): I am entitled to make a point of order.
I oppose the levy because it is unfair. It bears no relation at all to a farmer's ability to pay. As Deputy Bermingham said, is it to be on young animals slaughtered, on heavy animals slaughtered, on very small farmers and on very big farmers? It is so unfair that I am amazed that the Minister let it through the Cabinet. The Minister is a farmer and understands well the small margin of profits enjoyed by the beef farmer. In the difficult winter we had minimum profits were made and in some cases they barely broke even, as the Minister well knows.
Deputy Bermingham said that people would move out of beef. What worries me is that the people who are in beef at the moment are so heavily committed to lending institutions that they cannot readily move out of beef. Nor can they readily move out of dairying. How can they face these lending institutions and tell them they cannot meet their commitments now because, on top of everything else, they have to pay a levy on the sale of every animal, they have to pay a levy on the sale of every gallon of milk and further than that, there is a 2 per cent levy on the sale of all these products. This is grossly unfair and unjust. I hope the Government will give it serious consideration for the sake of the industry. While there may not be a swing away from beef or away from dairying in the immediate future because farmers cannot afford to move out of these areas, in the long term, unless this thing is stopped now the farmer is going to move out into an operation where he will not suffer these penalties and where he will not be asked to pay a levy on an article on which there is little or no profit after he has paid back all the people that he owes all along the line.
Intensive beef production today is probably one of the highest capital intensive operations in the country. The amount of money already spent is colossal because there was an enthusiasm generated by Deputy Clinton for dairying and beef production. The farmers acted on the best advice available. They took the advice and they measured their profits and some of these were encouraging and they have had a few good years. But now, out of the blue, the Government slaps on a levy. If the Government were to go along to an industrialist in the morning and tell him that regardless of his profits he must pay a levy on every tractor going out of his factory, he would be run out, and quite rightly so. That is how unfair the levy is. It bears no relation at all to profit.
There is another serious side to it. At the moment farmers are getting no credit at all for paying taxes but now, as the Journal pointed out recently, we have a series of taxes between levies and everything else and the farmers get no credit from the other sectors for paying this additional burden of taxes. I would urge the Minister to bet rid of the levy, to think again about it. It could lawfully wait, and the Minister could take the long summer to talk it over with his colleagues and not rush it through this House on the eve of breaking up. There is no hurry about it. The Minister should take it easy and consult some of his experts, and they will tell him that if we go along this road we will be paving the way for disruption—and I use that word deliberately—of Irish agriculture. It will not happen quickly but it will happen surely. If a farmer moves out of dairying—and why should he milk cows if he can afford not to? —many jobs are at stake. As Deputy Bermingham pointed out, the farmer has a free choice, and if he can afford not to milk cows why should he not go into easier systems of farming? They may not be as remunerative as dairying but at least that man will not have the tough job of milking cows every morning and evening, Sunday and Monday, in order to ensure that the Government of the day can pay their bills. That is what the levy amounts to.
I can assure the Minister that in the long term, if he continues with the 2 per cent levy and with the levy on disease eradication, he will discourage farmers from expanding into dairying and beef enterprises, and we know the effect that will have on the Irish economy. It is generally accepted in Europe, and indeed among our own best advisers, that this country of ours, climatically and every other way, is ideally suited to dairying and beef production, and any action by the Minister and his Government to prevent the development of this industry is nothing short of catastrophic. We have progressed a long way but we can go a lot further; we are by no means at the peak yet. There are a lot of fresh lands to be developed with EEC grants. The job potential of the dairying industry has not been tapped at all, and before we have started out properly somebody comes in to stop it. We are all interested in creating jobs for our families at home. We are all interested in seeing more and more co-operative societies, more and more meat factories, more and more processing plants. It is wrong for the Minister and his Government to do anything to discourage that development now. On the contrary, wherever he finds the money he should be encouraging that industry and encouraging those people to develop and expand and, as a farmer, he must know that every young farmer who is expanding nowadays is doing so with the help of the lending agencies and not out of any capital he has stacked away. Because the Minister has this knowledge I lay the blame on him fairly and squarely for allowing that abominable levy through the Cabinet.
I did not intend to intervene in this discussion but I simply cannot contain myself and that is why I am now on my feet. I simply want to say that I am totally opposed to this levy. This Government has gone daft. Particularly I think the present Minister for Agriculture has gone daft.
That is what the Deputy said when we got into France with the sheep.
I really believe that farmers will soon be charged a levy by this Government for breathing country air. Everything that is done now in agriculture must be levied. The Government have not the courage to have a straightforward income tax system for farmers. They have not the courage and they call it anything and everything but income tax and the people outside farming will not accept that it is income tax. It is the craziest system imaginable. The Minister has the job of going to Brussels to negotiate prices and to oppose levies in Brussels, and he is going with his hands tied behind his back because he is levying at home in the very same way. It is a most appalling approach. It is getting money from farmers by devious ways which appear not to be taxing the farmers, simply and solely because the Government said that they would not tax farmers and that they would double the food subsidies and so on.
The Minister is concerned, as all of us are concerned, about the reduction in cattle numbers and about the numbers of people who are becoming redundant in the meat processing business. With the expense the farmers have to suffer at present with disease eradication and the very serious losses they are suffering, how does the Minister expect to produce £10 million on top of this as a contribution to Government funds? In my view it is appalling. We must bear in mind that levies are now so numerous that they are hard to count and describe. Every day newspapers are produced we read of a new levy. I do not know where this will stop as far as levies are concerned.
We want to raise cattle numbers and increase farmer confidence in the future for cattle and milk production and for that reason I was surprised that the Minister when he returned from Brussels stated publicly that the leaders of Irish farming are in cuckoo land if they think that we are going to get something special for Ireland. He stated that unless those leaders appreciated what the over-supply is like in Europe next year, whether we like it or not, we will have quotas imposed on us. Perhaps that is something which the Minister would be justified in saying in confidence to farmers he was trying to get to appreciate that there was a problem but to say that publicly is admitting——
The Deputy is not dealing with the levy and he should remember that the only matter before the House at present is the levy referred to in the resolution.
I am dealing with the direct effects of that levy. The Minister has told us that there will be quotas unless farmers conform and that is tantamount to saying that if certain things do not happen he, as president of the Council of Ministers of Agriculture, is agreeing that because there is a problem in Europe Ireland must conform like other member states.
The Deputy is not dealing with the levy before the House. He must confine himself to that matter. The Deputy is dealing with something which he alleges happened in Brussels which does not have anything to do with the levy before the House.
Brussels is alive with levies but not as much as the Irish Government are with levies.
If the Deputy confines himself to levies he is in order.
I have been confining my contribution to the question of levies and what arises from them. I do not wish to criticise the Chair but in my view the Chair is being too restrictive because I could not be more on the ball than I am.
The Chair is not being too restrictive. The Chair is confined to what is before the House.
(Cavan-Monaghan): The Chair operates like a big gun; he can only see a straight line ahead of him at all times.
The Deputy should not continue to abuse the Chair. He should have more sense.
I do not wish to have any argument with the Chair. I have avoided that since I became a Member of this House and I will continue to do so. I am anxious to impress upon the Minister the effect of the decisions in relation to levies on Irish farmers. There is a levy on everything one can think of at present. It will not be long until even fresh air is levied. I should like to know how this is intended to encourage an increase in cattle numbers or milk production. I am convinced that farming here is doomed unless we increase milk production, irrespective of what the Minister thinks.
Hear, hear.
That is the basis of the whole beef herd. If we introduce levies on everything we must remember that those levies apply to the same cattle. I expect that the estimate of £10 million will be more. I am opposed to it because in no other country in Europe which we must compete against is such a levy paid. I should like to know what contribution is made by farmers in Northern Ireland and the United Kingdom towards disease eradication. When I was in office I was criticised regularly because, for instance, there were national aids in Germany five times those given here, because there were national aids in Holland four times ours, in Belgium three times ours and in France double what we were providing by way of national aids. That situation remains unchanged.
At that time there was a great rush by everybody, by the Commission in particular, to have the national aids assessed and equalised or abolished altogether. They got all the information they required in a great hurry but they did not do anything with that information when they got it. The present position is that Irish farmers are in competition with farmers in mainland Europe and in the United Kingdom where no levies are paid by farmers. National aids in those countries are a lot higher than those given to farmers here. How can we justify this? How can we create the confidence that will enable us to increase cattle numbers and milk production on which the whole future of our livestock industry is dependent? We are also talking about the future of the processing industry which can employ many people, particularly if we are going into cheese and other processing.
If the Minister is not prepared to admit that this is a discouragement in a big way I do not know what to say. We all want to see disease eradication. When I left office we were providing about £20 million for the eradication of bovine tuberculosis and brucellosis but the Minister that year gave back £7½ million of that money which was unspent. I am aware that the Minister can refer to the strike and the damage that caused.
What about the lock-out?
The lock-out I found when I assumed office was that disease levels were worse than they had been ten years previously after spending close on £100 million on disease eradication. I would not defend anybody who is trying to carry on in a hookey way in relation to disease eradication; they deserve all they get. The Minister deserves all the co-operation he can get in his efforts to eradicate disease. Frankly, farmers have been involved in substantial expense as a result of decisions made by the Minister. When he made a decision on the 30-day test I thought at first glance that it was a way to catch some of these smart alecs who thought they could make a quick buck by getting out one way or another. During the last five months while travelling throughout Leinster I learned that that is doing damage and costing farmers a lot of money. That is another additional expense they must bear.
They did not have that expense when the Deputy was in office because there was no disease eradication whatever.
Of course the Minister would go back over this ground. That was the best thing that ever happened—I did an immense amount of good for my successor.
We must stay on the levy. The other matters can be dealt with on the Bill.
The Minister will not let me talk about the effects the levy will have on livestock.
The Deputy is making an ass of himself.
The Irish people gave the answer earlier in the month.
Is the Minister concerned whether Irish farmers will be in a competitive position when they go to sell their produce on European markets or here at home or across the Border or in England? Should he not compare the position of producers in those countries with our producers? Should he not consider the distance we are from the main European markets and the additional costs that entails? All the evidence indicates that the income derived from beef is the lowest possible from farming. It is very modest. Why then should we hit the farmer in this additional way in a year when expenses have been so much higher than in previous years, with a long winter and a severe spring lasting up to the middle of summer, with costs rocketing? The Minister should consider seriously where he thinks we are going. Cattle numbers will inevitably go on dropping, milk production will continue to drop steadily. There is no point in wondering why these things are happening, why the position has been worsening all the time instead or improving or at least keeping pace with inflation. In the price fixing meeting in Brussels we got a minus factor which will reduce income substantially.
They are the circumstances in which the Minister is asking us to agree to a motion which will take more money from farming. I could not possibly agree to it, and if I were in office I would fight every inch of the road against it because it is the craziest method of getting money. The farmer is now levied on every damn thing he produces at a time when the cost of every service provided for agriculture is going up.
Will the Minister give us a comparison with other European countries in regard to what they are contributing in levies on the commodities we are now discussing? How can he maintain that our farmers can remain competitive, can increase livestock numbers and employment in the processing of meat and milk? This levy represents only further discouragement for the farming community. It is very easy to lower confidence but damn difficult to raise it, and it is pretty low now.
(Cavan-Monaghan): I am opposed to this levy. It is in the national interest that animal disease be eradicated so that we may get the best price possible on foreign markets for our livestock. As Deputy Bruton has said, it is also in the interests of humans that animal disease should be eradicated because it is accepted that humans can contract animal diseases. It is also in the national interest because livestock exports bring in the large sum necessary to pay for the things we do not produce here, such as machinery for industry and agriculture.
All this makes an excellent case for saying that the cost of animal disease eradication should be borne by the general taxpayer. There is not any justification for asking one section of the community to bear the cost of a service that benefits the entire community. I am against the levy because it does not relate to the capacity of the farmers to pay it. It is not based on profits—it is a flat rate on cattle slaughtered or exported, whether they are the property of a farmer with a PLV of £10 or a farmer with a PLV of £250. It does not bear any relation to the earning capacity of a farmer, of his financial or family circumstances. I am opposed to the levy because it comes at the end of a two-year period in which farmers were asked to contribute in several ways to general taxation. I will mention only the headings under which that was done. First of all the agricultural grant was slashed.
The Deputy will deal with the levy, not with the agricultural grant or other matters.
(Cavan-Monaghan): I crave the Chair's indulgence for one moment. I am making the case that this is the last straw that will break the camel's back.
The Chair will not allow the Deputy to go on to other matters.
(Cavan-Monaghan): It is impossible to conduct a debate if one is not allowed to put forward an argument. My argument is that our farmers already have been sufficiently taxed in the form of rates, payment for the 30-day test, the abolition of the land subsidy and the subsidy on artificial manure.
I have asked the Deputy not to continue on these lines. Surely he knows we are dealing with the levy and not with anything else.
(Cavan-Monaghan): I am dealing with these other matters to show why it is unfair to ask farmers to pay this levy in addition to the other imposts I have mentioned. We have got the 2 per cent levy which started all the trouble we have experienced over the last few months. I do not believe that those levies are the brain-child of the Department of Agriculture. I believe they were created by the Department of Finance who have no knowledge of how the agricultural industry works or of how rural Ireland operates. As Deputy Clinton said, there has been a litany of levies. There is the 2 per cent levy, this levy, the dairy inspection levy, all thrown into the House in the last days of this session with 20 other Bills. The House would be in grave dereliction of its duty if it did not oppose this levy.
I come from a constituency where there are a number of meat processing factories. There is one in Ballyjamesduff which processes cattle and there is one in Cavan town which is mainly concerned with the processing of pigs but, on occasion, slaughters cattle. Deputy Bermingham made a very excellent case in relation to this levy. He said that farmers should be taxed on accounts the same as the shopkeeper, the businessman, or any other person, but that to impose this levy would tend to reduce the number of cattle available to those meat factories and this means there will be a reduction in the number of people employed. He comes from a constituency where there are a number of meat processing factories and knows what the result of this imposition will be.
Those levies are being introduced without any thought. Some of the Minister's party throughout the country have been saying that the 2 per cent levy was a last-minute operation introduced by the Minister for Economic Planning and Development. If there is strong opposition to this levy in the House it should strengthen the hand of the Minister for Agriculture to oppose them in the Cabinet room and anywhere else they should be opposed. That is the stand this party take on levies. It is not just possible to stand up and say: "I oppose the levy" and sit down. That is not making an argument against the levy. I have been able to point out the series of levies which have been imposed on farmers over the last two years. This is certainly the last straw. This will be opposed by this party.
The people engaged in agriculture cannot welcome this levy. There are many farmers on the other side of the House and if they were allowed a free vote I doubt if they would vote in favour of this levy and the other levies which are being imposed because their farmer constituents would not want them to impose those levies on them. I come from a county which has geared itself to increased production of milk over the last few years by bringing in a better quality cow, having better manuring of land and installing modern dairies. This necessitated a huge investment and that has to be paid for to the Agricultural Credit Corporation and to the banks. In many cases property is mortgaged.
We have had about four levies introduced. They will affect the people engaged in dairying more than any other type of farmers. I can see almost £1 million being extracted from the farmers of County Clare through the imposition of the 2 per cent levy on the processing of milk, the levy which is supposed to pay for the eradication of brucellosis and the further levies which are imposed on the sale of cattle to factories and at the point of export. I believe that dairy farmers are carrying more of the taxation imposed by such levies than any other section of the farming community. In a county where the size of the holding is 200 or 300 acres in an area where the herds have an average of between 50 and 70 cows the income of those farmers can carry this taxation, but in a county where the average valuation for 70 per cent of the people is £20 the taxation imposed on such farmers is out of proportion to that which they should be expected to bear. Therefore, I am totally opposed to this method of swelling the coffers of the Exchequer. It reminds me of the bad days of the economic war when a tariff was imposed on our stock exported to England. This went on for years.
The idea the Government have of reintroducing this type of levy is an easy method of collection but I am sure it will be resisted and resented. There have been indications of this resentment quite recently in the European and local elections. Have any of our EEC partners introduced this levy? Does it help the Minister when he is trying to resist the co-responsibility levy when this levy is imposed here? I believe the introduction of this levy is weakening the Minister's position. It is quite easy to see that there is no limit to which this levy might be extended in the future. If this levy proves successful it could be a permanent impost in our tax system. Does this brighten the future for farmers? The imposition of this levy certainly does not brighten their future at the end of a very hard winter when costs have escalated. This has been ignored by the Minister for Finance who is responsible for keeping taxation at its present level. There is a real danger that in order to avoid levies the slaughtering of animals will not be carried out but that they will be smuggled across the Border. As a consequence there will be a reduction in employment in our meat processing factories——
They will not get MCAs if they smuggle them into the North of Ireland. They will lose a lot of money. They are not as bad as that.
That is not always the case. This levy will be a permanent feature but the MCAs are to be phased out.
In any event we will not debate smuggling on this motion.
There is every risk that this will lead to smuggling.
Deputy Taylor is in possession, not Deputy Bruton or anyone else.
The Deputy is right and the Minister is wrong.
If what the Minister says is true it might discourage smuggling and I would welcome that. Generally a system of levies is a form of discouragement and one would be less than honest to one's constituents if one did not oppose this method. It is reminiscent of landlordism: when a person made improvements to increase milk production or stock the rent was increased. This was in the bad old days. People with limited holdings and those who are in congested areas will carry the heaviest load. For that reason I am totally opposed to any levies being put on people who are taxed already or who will be taxed next year on a valuation of £40.
I am surprised the Minister for Agriculture agreed to the levies which will fleece and crucify the farmers. The Government have imposed other levies on the farmers in the past few months and they propose to introduce further levies in the future. Farmers have always been prepared to pay their fair share of taxation. They have never said otherwise. When their income increased under our Government we imposed tax on farmers and this was opposed by the present Government. We believed that the taxation we imposed was fair because the income of farmers had increased. Each year their prices increased by 20 per cent to 25 per cent and their overheads remained static. In those circumstances we saw nothing wrong with imposing tax because it took into consideration the ability of a farmer to pay and he was allowed expenses as were other sections. When we taxed the farmers the present Minister and the present Government opposed it. Prior to the general election the canvassers went round in the dead of night promising that if Fianna Fáil were elected they would remove the tax——
The Deputy should speak on the levy. He has had plenty of opportunity to lead up to it.
What the Deputy is saying is true.
We have had enough tonight without Deputy Begley coming in. I ask Deputy L'Estrange to speak on the levy.
Instead of reducing the taxation we imposed the Government have imposed a new kind of taxation which is unfair, unjust and iniquitous. It is a type of taxation that will retard and stifle production. We have 12 million fertile acres of soil, we have grass second to none and it is essential that every encouragement be given to farmers to increase production instead of the Minister introducing a Bill to stifle production. If we have a larger national cake, if we increase our exports, we can give more employment in our meat factories instead of the situation where some of them are closed and people put out of employment. The Minister knows that 400 workers are threatened with redundancy. The Minister knows that if the farmer is wealthy the whole nation will be wealthy, but if the farmer is poor and struggling the whole nation will be poor.
Deputy Taylor mentioned an important point, one that I heard mentioned in the EEC on many occasions. It is no wonder the Minister came back with a bad agreement. He spoke about increased milk production but we know that milk production is dropping. So far as the co-responsibility levy is concerned, how could the Minister oppose that levy when he met the EEC Ministers? The first thing they would say to the Minister was that his Government were imposing a levy of almost 1 p per gallon on milk. Their view would be that if our Government thought the farmers were in a position to pay that levy out of their profits, what was wrong with the EEC imposing a co-responsibility levy? For the first time in the past 10 years a Minister for Agriculture has come back from Europe with a very bad agreement so far as the farmers are concerned. It is certain the Minister was in no position to argue against the co-responsibility levy when his Government were imposing a levy. We know he did not get any increase for the milk farmers despite the fact that their production costs are increasing as are their rates and taxation. In addition, there is this further levy that will harm milk production here.
It is an unfair, unjust and iniquitous form of taxation. Any taxation that does not take into account the ability and earning capacity of the farmer is unfair and unjust. A sum of £3 per head will be taken for each beast sold or exported. This is happening after a bad winter when there was a scarcity of food stuffs. The farmers had to pay enormous prices for foodstuffs and in many instances they amounted to 50 per cent of their total profits for wintering cattle. If the Minister consults his friends who fed cattle during the whole year he will find that they were lucky if they had a profit of £6 to £10 per head on each beast. The taxation will impose a charge of from 33? per cent to 50 per cent on each beast sold. A farmer with a PLV of from £12 to £14 who is getting the dole and who has four or five cattle could find himself paying taxation of £12 to £20 per head on cattle sold.
